In the 1990s assessments on the
state of African economies make dismal reading. It is now
apparent that most of the development scenarios in the 1980s
severely underestimated the length and the extent of the
structural adjustment, and its ramifications for employment and
unemployment, particularly in the continent's large cities. The
optimistic scenarios for the 1990s had been premised on a much
earlier recovery of international commodity prices and a speedier
response of and support from national and international
investors. Beyond these failures, another unexpected setback to
economic upturn was the reappearance of East European countries
as strong competitors for the already diminishing flows of
external resources to the continent. Overall, available evidence
reveals that the anticipated upturn in growth and employment
failed to materialize across most of Africa and that the
long-term prospects for economic recovery, especially in
sub-Saharan Africa, "are most sobering and disturbing"
(ILO-JASPA, 1992, p. 5). Africa is now the only global region
where, during the next decade, the economic situation is expected
to deteriorate, with "significant increases in the
proportion of the population under poverty" (ILO-JASPA,
1992, p. viii). Accordingly, it is argued that the question of
unemployment and its impact on poverty "still remains,
perhaps, the number one social problem facing many African
countries" (ILO-JASPA, 1992, p. 1).

The persistent economic crisis in
Africa, particularly as regards weak employment growth and mass
poverty, is manifest most visibly in the condition of the
continent's large cities. The objective in this chapter is to
tease out emerging trends in the state of Africa's urban
economies in the 1990s. This task will be approached in terms of
assessing the respective impacts of globalization and informalization
as interwoven processes shaping the complexion and condition
of city economies. Three major sections of discussion are
presented. First, the meaning and ramifications of globalization
in terms of the demise of modern or formal sector employment in
Africa's large cities will be reviewed. Against this background,
in the second section the focus turns to examine the advance of
informalization and of the massive extension of the informal
economy throughout most of urban Africa. The third section
centres on a particular facet of informalization that is
dramatically altering the landscape of major African cities,
namely the advance of urban cultivation. Lastly, the concluding
comments draw attention to certain urban policy initiatives that
might offer signposts for a way forward from the current economic
dilemma of Africa's large cities. Although source material and
examples will be cited from all parts of Africa, the discussion
is biased towards the experience of the urban areas of eastern,
central, and southern Africa.

Globalization and the demise of urban formal economies

As explored in chapters 2 and 3,
the phenomenon known as globalization - the progressive
integration of various parts of the world into a global economy
and global finance system - has attracted considerable debate
over the past decade (Dieleman and Hamnett, 1994). For some
writers, notably Castells (1992), the forging of a global economy
is an intoxicating and momentous process, one of the major
structural features of the contemporary age. The global economy
is viewed as one:

that works as a unit on real
time on a planetary scale. It is an economy where capital
flows, labour markets, commodity markets, information, raw
materials, management and organization are internationalized
and fully interdependent throughout the planet, although in
an asymmetrical form, characterized by the uneven integration
to the global system of different areas of the planet.
(Castells, 1992, p. 5)

Most observers agree that, in the
current phase of globalization, "a new structure of global
competition has arisen" as a result of the appearance of
"global" markets and "global" production
complexes (Thrift, 1994, p. 368). Although many factors
contribute to the making of this new structure of competition,
particular importance is attached to new innovations in
technology, such as micro-electronics, telecommunications, or
materials science, which exert a profound impact on refashioning
world production systems. Key elements in globalization have been
the growth of transnational production and the increasing
openness of and interdependence among national economies.
Alongside new globalized production strategies "there has
been a parallel integration of financial markets which, together
with a vastly improved global telecommunications and
transportation infrastructure, has increased global economic
integration in general" (Doohan, 1994, p. 26).

Such changes have profound
impacts at the level of both national and urban economies and for
individual enterprises. At the level of national and urban
economies, the major impact has been an intensification of
international and local competition for markets and investments.
Increasingly, rates of growth of GDP and of employment hinge on
an economy's ability to compete successfully within the new
system of globalized production. At the level of the enterprise,
the effects have been to stress the importance of adopting new
process technologies, of new flexible systems of work
organization, and of shifting towards flexible rather than
Fordist mass production systems. Recent processes of
globalization have given rise to new geographies, with the global
economy described as a "space of flows" (Castells,
1989) or a necklace of localized production agglomerations strung
out around the world (Storper, 1992). As noted by Rakodi in this
volume (chap. 2), a central place in the organization,
coordination, and control of the new global economy is accorded
to sets of global or world cities. In addition to managing a new
international division of labour in manufacturing, these cities
are key hubs for the control and coordination of global finance
and producer services. Because world city status brings with it
considerable economic benefits in terms of the development of
new, dynamic, high-income growth sectors of the economy,
"global city status is something to be coveted, defended and
fought over" (Dieleman and Hamnett, 1994, p. 358).

What are the implications for
Africa and its cities of recent globalization trends and of the
new competition? In many respects the changes associated with
globalization are disturbing. None the less, it is clearly better
for national and urban economies to be affected by them than to
be left out. For all its negative side-effects, exposure to
"the new competition" seems to be increasingly
essential for augmented growth, efficiency, and sustained job
creation (Storper, 1992; Doohan, 1994). Despite some notable
African efforts at place marketing for industrial investment
(fig. 10.1), most of Africa has been "left out" of the
globalization processes now taking place. With notable
exceptions, such as parts of North Africa and Mauritius
(Rogerson, 1993a), the so-called new international division of
labour, characterized by export-processing manufacturing, has
bypassed the major part of the continent. Participation in the
globalized production system was determined partly by location
and geopolitical significance, partly by the existence of a
strong, repressive, and reliable state apparatus, and partly by
the existence of a technological and human resource
infrastructure (Schmitz, 1984). In Africa the preconditions were
not established for national and urban economies to compete
successfully in the new growth sectors of the global economy;
overall, Africa has lacked the infrastructure, human resource
base, and the capacity for state intervention that the experience
of the newly industrializing countries shows are so essential to
capture new growth opportunities.

Fig.
10.1 Place marketing in Africa

Looking to the prospects for
flexible production, it is evident that in certain parts of the
developing world the shift to flexibility may generate renewed
growth opportunities for both import substitution and
export-oriented production (Pedersen et al., 1994; Rogerson,
1994a). Kaplinsky (1991, p. 33) points out that flexible
production "is inherently descaling at the plant level in
many sectors, and this holds open new possibilities for renewed
import substituting industrialization." Moreover, additional
opportunities for new manufacturing growth are raised by the
possibility of fashioning production to take account of product
specialization. This capacity to "niche" output to the
specific conditions of individual markets opens the prospect of
evolving appropriate products for developing world markets and
the development of niche products (Kaplinsky, 1991, p. 34).
Nevertheless, the prospects for evolving export-oriented flexible
production are recognized as highly uneven because key changes in
the transition to flexible production are of an organizational
nature and thus human resource intensive, a situation that
creates particular problems in much of Africa. For example, in
Zimbabwe it was concluded that a fully fledged scenario of
flexible specialization is "not on the agenda"
(Rasmussen and Sverisson, 1994, p. 30). Overall it has been
suggested that the greatest future potential for evolving
post-Fordist production forms lies in Mexico and the Caribbean,
North Africa, and the economies of the Association of South East
Asian Nations, with the weakest overall prospects in sub-Saharan
Africa (Kaplinsky, 1991, p. 34), with the possible exception of a
democratic South Africa (Rogerson, 1994a).

As Simon and Rakodi both argue
(chaps. 2 and 3), central to Africa's progressive
peripheralization and current economic crisis is the fact that
the continent has been largely unable to transcend its
traditional functions in the world economy of raw material
supplier and a captive market for imported manufactured goods.
Put simply, globalization processes have been "stalled"
in Africa, with corresponding severe consequences for its urban
economies. In terms of manufacturing investment, as Rakodi notes,
large foreign enterprises have shunned the continent,
particularly since 1980, creating a situation that for many
African countries the major sources for outside investment derive
from international development agencies rather than private
capital investment. Accordingly, Africa is the only large and
populous continent without a true newly industrializing country,
"seemingly another reason for its marginality to global
circuits of commercial, industrial and financial capital"
(Simon, 1993, p. 7), despite some progress in state and external
investment in industry in North African countries between the
1950s and the 1970s. Much attention (and hope) currently centres
on the prospects over the next decade for a post-apartheid
democratic South Africa to emerge on the global stage and attain
the status of a true newly industrializing country. Indeed, the
city of Johannesburg is targeting its urban economic development
strategy for the next decade to an ambitious goal of attaining
"world city" status (Rogerson, 1994b; Rogerson and
Rogerson, 1994). Elements of that strategy will involve building
up the financial and producer services sector, attracting the
offices of international organizations, and developing a cultural
strategy to "image" the city better to foreign
investors. In this respect, over the next decade, Johannesburg
will increasingly be in the business of competing with Nairobi,
currently the only other sub-Saharan African city that assumes a
supranational role in the sphere of information flows,
international agencies, and financial transactions (Simon, 1992,
1993).

The stalled process of
globalization in Africa underpins the emasculated character of
the formal economy in the majority of the continent's cities. In
most countries of sub-Saharan Africa, regular urban wage
employment opportunities constitute only a small fraction of
total employment, typically between 5 and 10 per cent (ILO,
1992). For the period of the early 1980s, ILO studies disclose
that regular urban employment fell in many countries (down 33.6
per cent in the Central African Republic in 1980-1986 and down 27
per cent in the Gambia between 1979 and 1986) and elsewhere
failed to match the growth of the non-agricultural labour force
(van Ginneken, 1988, p. 17). For example, in Windhoek, Namibia,
the most recent data point to employment growth in the formal
sector running at "probably less than 1 per cent"
(Frayne, 1992, p. 7). The slow-down in modern sector employment
in recent years is essentially attributed "to the fact that
the public sector - as the engine of employment growth - has
become increasingly unable to sustain the high rates of labour
absorption of the 1970s and early 1980s" (ILO-JASPA, 1992,
p. 47).

The impact of structural
adjustment, which created shortages of imported materials,
reduced investment, and led to declining effective demand, has
meant that urban-based manufacturing has suffered particularly
badly (ILO, 1987, p. 92; Gilbert, 1994). Although large-scale
manufacturing enterprises have created an impressive volume of
jobs in the newly industrialized countries of Asia and Latin
America, they have generated only a relatively small number of
employment opportunities in urban Africa (Rondinelli and Kasarda,
1993, p. 105). Indeed, as described by Beavon in chapter 5, the
downturn in large-scale manufacturing has affected even the most
dynamic industrial agglomeration in Africa, the
Pretoria-Witwatersrand-Vereeniging region - South Africa's
economic heartland. Underpinning this downturn has been a complex
of factors including a decline in mining, cut-backs in military
production, and the consequences of excessive decentralization
programmes that encouraged the outflow of labour-intensive
production activities, most notably of much of the region's
clothing and textiles manufacturers (Rogerson and Rogerson, 1994;
Rogerson, 1995a), rather than structural adjustment.

In some countries, such as
Tanzania, private sector formal employment has been stagnant ever
since the mid-1960s, producing a situation that "public
sector employment is the most important source of formal
employment," especially in cities (Therkildsen, 1991, p.
252). In Luanda, employment in "public service and state
enterprises absorbed almost half of the working population"
(Aguilar and Zejan, 1994, p. 348). In Kenya, where it was
estimated that the public sector accounted for 50 per cent of
employment, job growth in this sector hovered around 4 per cent
in the early 1980s, accelerating to 4.7 per cent per year in
1987/88 (Moser et al., 1993, p. 40). Nevertheless, under
adjustment programmes, civil service reform has meant that public
sector employment has no longer expanded rapidly and been able to
serve in part as a welfare system during periods of economic
downturn (ILO-JASPA, 1992, p. 48). Instead, public sector reform
in several African countries has precipitated substantial
layoffs, particularly in the lower echelons (Fapohunda, 1991;
ILO-JASPA, 1992). A wave of public sector retrenchments took
place in the 1980s and has continued into the 1990s (see table
10.1) effecting a downturn in urban jobs in particular. Women
appear to have been most affected by the retrenchments and
restructuring of the civil service because they tend to
concentrate in the lower end of the occupational hierarchy
(ILO-JASPA, 1992). Alongside this general faltering in public
sector driven urbanization across Africa (Therkildsen, 1991),
there has been a sharp fall in modern sector wages in urban
areas, especially once again among civil servants (ILO, 1992, p.
39; ILO-JASPA, 1992; Hodd, 1993). For example, in Mozambique
"probably no family in an urban context is able to survive
on the income derived from one of the 400,000 formal sector
Jobs" (Assuncuo, 1993, p. 32). The impact of these trends on
employment is noted by Dubresson in Abidjan (chap. 8), Obudho in
Nairobi (chap. 9) and, complicated by the transfer of the capital
to Abuja and the role of oil prices, Abiodun in Lagos (chap. 6).

With public sector retrenchments
accompanied by a declining absorptive capacity of the (private
sector) formal economy, levels of open unemployment have
escalated across urban Africa. During the 1980s few urban areas
of sub-Saharan Africa escaped major increases in joblessness;
current estimates are of unemployment levels in the range of 20
per cent, which, it is projected, "could exceed 30% in most
cities in sub-Saharan Africa by the year 2000" (ILO-JASPA,
1992, p. 29; see also Dubresson, chap. 8). Even South African
cities are part of this continental trend, with open unemployment
in Port Elizabeth climbing to an estimated 25 per cent in 1991
owing to restructuring and a severe shake-out in the city's
manufacturing sector (Rogerson, 1995b). The ILO (1994a, p. 24)
records increasing open unemployment in African urban areas and
notes that a "worrying aspect is that unemployment is
creeping up the education ladder, with even university graduates
now being affected." The worst levels of unemployment,
however, are among the urban youth, who are said to constitute
60-75 per cent of the unemployed though they account for only
one-third of the labour force (ILO-JASPA, 1992, p. 16).
Typically, in urban Kenya the most affected age group for
unemployment comprises those aged 20-29, who represent 65 per
cent of all those reported as unemployed (House et al., 1993, p.
1212). Abiodun (chap. 6) notes that at least 70 per cent of the
unemployed in Lagos State are aged between 15 and 29.

The consequences of stalled globalization on the formal
economies of Africa's cities have therefore been devastating.
Adjustment and economic restructuring have produced major changes
in urban economies and the urban labour market since 1980 (van
Ginneken, 1988; ILO, 1994a). The security, if not the stability,
of regular wage employment has declined and as a result the
distinctions between employment conditions in the formal and
informal economies of cities have become progressively blurred.
With the erosion or slow growth of the formal economy, large
numbers of people have moved into either self-employment or
casual wage employment or have to supplement formal sector wages
with income generated from informal sector activity. This has
produced the widely noted phenomenon of the informalization of
the urban economy in Africa (Stern, 1992a, p. 542).

The informalization of the African city

In almost all the cities of sub-Saharan Africa (with the
exception of certain South African cities) the majority of the
urban workforce are currently engaged in a highly differentiated
range of small-scale, micro-enterprise or informal activities
such as hawking, scavenging, informal construction, small-scale
production, or the provision of a host of low-cost services,
including public transport activities. The diversity of informal
economic life across the continent is evident from examining a
cross-section of research studies from all parts of the continent
(see, for example, Olowolaiyemo, 1979; Oyeneye, 1980; Fowler,
1981; Jourdain, 1982; Abdel-Fadil, 1983; Lachaud, 1984; Schamp,
1984; Aboagye, 1986; Hofmann, 1986; Antony, 1989; Maldonado,
1989; ILO, 1991; Mutizwa-Mangiza, 1993; Tevera, 1993, 1994;
Yankson, 1995; Rogerson, 1996).

Informal economic enterprises - those defined as small-scale,
mostly family-operated or individual activities that are not
legally registered and usually do not provide their workers with
social security or legal protection - absorb at least half of the
workforce in many large African cities (Rondinelli and Kasarda,
1993, p. 106). The most recently available data produced by
ILO-JASPA (1992, p. 29) reveal that, for sub-Saharan Africa, the
informal economy currently engages 63 per cent of the total urban
labour force. Moreover, the informal economy is still on an
upward growth trajectory as regards labour absorption (Doohan,
1994, p. 25). Evidence from urban Zambia suggests that during the
1980s the size of the informal economy "more than trebled in
six years" (Peters-Berries, 1993a, p. 3). The ILO estimates
that during the 1990s the informal economy will be
"generating some 93 per cent of all additional jobs in urban
Africa" (ILO, 1992, p. 39; Maldonado, 1993, p. 245). Such
findings underscore the conclusion that the small-scale,
micro-enterprise or informal economy currently represents the
most rapidly expanding employment segment of the contemporary
African urban economy (ILO-JASPA, 1992, p. 29; Stren, 1992a, p.
542). That said, it must be acknowledged that in certain parts of
the continent, particularly in the urban areas of west and north
Africa, the informal economy is not a new phenomenon; rather,
there is evidence that the economies of many pre-colonial cities
in west and north Africa have been "informal" for
centuries (see, for example, Peil, 1979; Diemer and van der Laan,
1981; Findlay and Paddison, 1986).

The small-scale or micro-enterprise economy in urban Africa
exhibits considerable differentiation. In South African research
a useful conceptual distinction is made between two categories of
informal enterprise (Rogerson, 1996). First are survivalist
enterprises, which represent a set of activities undertaken
by people unable to secure regular wage employment or access to
an economic sector of their choice. Generally speaking, the
incomes generated from these enterprises, the majority of which
tend to be run by women, usually fall short of even a minimum
income standard and involve little capital investment, virtually
no skills training, and only constrained opportunities for
expansion into a viable business. Overall, poverty and the
desperate attempt to survive are the prime defining features of
these enterprises. Second is the category of growth
enterprises, which are very small businesses, often involving
only the owner, some family members, and at most one to four paid
employees. These enterprises usually lack all the trappings of
formality, in terms of business licences, formal premises,
operating permits, and accounting procedures, and most have only
a limited capital base as well as rudimentary business skills
among their operators. None the less, many growth enterprises
have the potential to develop and flourish into larger formal
small-scale business enterprises.

In most cities, including many of those studied in part II of
this volume, the pattern is overwhelmingly of a small-scale and
informal economy weighted towards trade-related activities (on
Angola see Assuncao, 1993; on Botswana see Karim-Sesay, 1995; on
Namibia see Frohlich and Frayne, 1991; on Zambia see
Peters-Berries, 1993a; on South Africa see Rogerson, 1992a, 1996;
see also in this volume Abiodun on Lagos and Piermay on
Kinshasa). Typically, a 1988/89 survey in Dakar disclosed that 72
per cent of enterprises were in commercial trading activities
(ILO, 1992, p. 39). In the urban areas of southern and eastern
Africa a sectoral breakdown of micro-enterprise discloses that
the share of trading enterprises is at least 50 per cent in
Swaziland, more than 60 per cent in Botswana and Malawi, and
reaches almost 70 per cent in the cities of Kenya and South
Africa (Liedholm and Mead, 1993, p. 9). A converse pattern
appears for manufacturing micro-enterprise, ranging from 17 per
cent in South Africa and Botswana, to 35 per cent in Lesotho, to
65 per cent in Zimbabwe, mostly engaged in the production of
textiles and garments (Liedholm and Mead, 1993, p. 8). Although
the structure of Zimbabwe's urban small-scale economy
distinguishes it from most other African countries, recent
evidence suggests that one impact of structural adjustment has
been to change "the structure of the [expanding] urban
informal sector from predominantly manufacturing to more trading
activities" (Peters-Berries, 1993b, p. 8).

Participation in the small-scale enterprise economy does not
mean that most of the workforce is self-employed. Recent ILO
(1992, pp. 39-40) research shows that often a considerable
proportion of the workforce, almost two-thirds in the case of
Abidjan, work for wages rather than profit (see also chap. 8).
However, it is clear that the vast majority of micro-enterprises
employ only limited numbers of workers. In their seven-country
comparative investigation of micro-enterprises in urban areas of
southern and eastern Africa, Liedholm and Mead (1993, p. 12)
demonstrate that consistently over 90 per cent of enterprises
engage fewer than five workers and the largest share (normally at
least 50 per cent in most countries) is made up of one-person
enterprises. What these data suggest is that the growth recently
recorded in the small-scale sector of African cities is occurring
primarily through the replication of informal businesses, a
pattern of involution rather than evolution, which would result
in an increase in the number of employees. Manning and Mashigo
(1993, p. 16) write of a process of "growth through
replication, or 'extensive' growth rather than growth through
'intensification' or capital/skill/technology upgrading" as
typical of most urban micro-enterprise.

Finally, one other effect of the increased importance of the
informal and small-scale economy in African cities is that more
women are now working. Consistently, women emerge as the major
proprietors of micro-enterprise in urban Africa (Liedholm and
Mead, 1993, p. 14; Aguilar and Zejan, 1994, p. 349; Karim-Sesay,
1995). Thus, for example, in Kenya between 1977/78 and 1986
women's participation in the urban workforce rose from 39 to 56
per cent, accounted for largely by their prominence in informal
work (ILO, 1992; House et al., 1993; see also chap. 9). Several
studies draw attention to the existence of marked gender
divisions of labour within the urban small-scale economy of
Africa. In urban areas of Lesotho, women cluster in businesses
that are "an extension of domestic chores (such as selling
food items) and a spatial and temporal extension of traditional
activities (such as beer brewing)" (ILO, 1994b, p. 33).
Likewise, a clear sexual division of labour surfaces in urban
Zambia and Angola, with women predominating in petty trade
whereas men are mostly found in activities surrounding
manufacturing, construction, or repair services (Peters-Berries,
1993a, p. 3; Aguilar and Zejan, 1994, p. 349). For Windhoek,
Frohlich and Frayne (1991, p. 8) observed marked sexual divisions
of labour in trading activities, with fruit, giblet soup, offal,
and vetkoek sold mainly by women, "whereas all other
groceries, clothes, wood and luxury goods were sold by men almost
exclusively." In South Africa, women cluster in trade, food
preparation, dressmaking, and child-care activities (Liedholm and
McPherson, 1991; Rogerson, 1994c). Moreover, research discloses
the disproportionate number of women relegated to the lower end
of the informal economy in terms of profitability and long-term
development potential. Businesses run by women in urban South
Africa, for example, were more likely to be a source of
supplementary household income than were those run by male
proprietors (Riley, 1994). An important finding is that women
earn less than men in the informal economy, because the most
profitable and fastest-growing small-scale businesses are
dominated by male entrepreneurs (Friedman and Hambridge, 1991;
Riley, 1994).

In seeking to explain the recent widespread surge of activity
in the micro-enterprise economy across urban Africa, two major
sets of issues must be discussed. The first concerns the demise
of the formal economy, the mushrooming of survivalist enterprise,
and a linked decline in the profitability of certain formerly
promising spheres of informal work. The second relates to the
increasing "informalization" of formal enterprise,
which is associated with an expansion of subcontracting and
outwork in a number of economic sectors. It is important to
monitor the balance between these two trends in terms of
assessing the long-term developmental implications of
informalization processes in urban Africa.

The key explanatory factor for the proliferation of
small-scale and informal economic enterprise is undoubtedly the
progressive emasculation of the formal economy. This can be
linked back in turn to the nature of stalled globalization,
producing a mosaic of unevenness in the global economy. The
implications of structural adjustment have further exacerbated
the contraction of the formal economy. Clearly, informal work is
not a refuge for newly arrived migrants to African cities,
because many participants are long-term urban residents. Falling
real wages in the formal economy forced many employed workers to
search for a supplementary income source in the informal economy,
as has been richly documented for Kampala (Bigsten and
Kayizzi-Mugerwa, 1992), Maputo (Assuncao, 1993), and Kinshasa
(Piermay, chap. 7). The withering of the formal economy
(including both public and private sector components) gave rise,
however, to a renewed impetus for an outflow of skilled labour
into the small-enterprise economy (Fapohunda, 1991, p. 28).
Retrenchments in the public sector affect not only civil servants
but also skilled technicians made redundant owing to
restructuring or closure of public sector enterprises. Because
the informal economy "has become an important means of
survival for this group of workers," this raises the
prospect of technological upgrading of the small-scale economy
(Tesfachew, 1992, p. 26). For example, Tesfachew notes that
Structural Adjustment Programmes in Nigeria induced informal
sector enterprises to increase their intake of apprentices,
thereby furnishing new skills. Nevertheless, the impact on the
small enterprise sector of wide-scale retrenchments and/or
closure of formal enterprise may not always be positive
(Tesfachew, 1992). In many cases a flood of new entrants into the
informal economy can engender a situation of
"overtrading" and a consequent decline in incomes
earned and working conditions in such activities (Mhone, 1995).
For instance, Dawson (1990, p. 11) observed of the Ghanaian
experience: "While a steady flow of skilled labour into
small firms acted to inject new skills and ideas into the sector,
the avalanche of new entrants which followed on from the
implementation of the retrenchment process - which saw 20 per
cent of the total salaried labour force retrenched by the end of
1989 - had an altogether more negative impact." In urban
Zimbabwe, there is alarming evidence that many areas of informal
services and production, particularly those activities dominated
by women, are now saturated and cannot absorb any more labour
(Kanji, 1995, p. 46).

In urban South Africa the demise of the formal economy is, to
a large degree, responsible for the surge in the number of
survivalist enterprises in already "overtraded" income
niches such as spazas (informal retail businesses) and hawker
operations (see Rogerson, 1991a, 1994c, 1996) and for falling
levels of profitability in activities such as the operation of
taxis or shebeening, which formerly exhibited signs of expansion
and seeming long-term growth potential. Recent work shows that in
both these particular spheres of small-scale enterprise, a rash
of new business entries has been associated with a deepening
crisis of declining returns for entrepreneurs and worsened
working conditions for employees (Khosa, 1993).

Overall, it must be emphasized that the combined impacts on
the small-scale enterprise economy of recession in the formal
economy and of structural adjustment measures are both varied and
potentially contradictory. One set of consequences, noted above,
has been the flood of survivalist enterprises in urban activities
such as hawking, trading, or transport services, as occurred in
Ghana, Zambia, Zimbabwe, or South Africa (see Tesfachew, 1992;
Peters-Berries, 1993a,b; Rogerson, 1994b; Kanji, 1995; Mhone,
1995). By contrast, in Côte d'Ivoire "the informal sector
appears to have been protected or shielded from the unfavourable
trends in the world economy" (ILO, 1987, p. 93). Here the
recession has reinforced or strengthened the comparative
advantage of the urban small-scale economy by the transference of
a large share of the demand for modern sector goods to informal
enterprise (ILO, 1987). What appears to have occurred in urban
Côte d'Ivoire is a process of informalization that has shifted
the locus of production activity away from formal to informal
establishments (Moser et al., 1993, p. 43). The evidence is less
clear, but seemingly "a similar shift is said to have
occurred in Kenya" (Moser et al., 1993, p. 28).
Nevertheless, Dubresson (chap. 8) is far from convinced that the
small-scale enterprise sector can replace the formal sector and
promote an accumulation process sufficient to sustain Abidjan's
economic vitality.

A second key theme in the expansion of the African urban
small-scale and informal economy relates not to the demise of the
formal economy as such but to growing linkages between formal and
informal enterprise. Informalization is the process by which
formal factory jobs are increasingly displaced by jobs in
unregistered plants and home-working. The advantages of
contracting out work to informal producers are the circumvention
of labour regulations and the lowering of labour costs. A
strengthening trend has been noted towards the so-called
"informalization of formal enterprise," which refers to
situations in which larger business enterprises seek to bypass
regulations covering employment protection and labour security by
establishing or linking their production to small, informal
ancillary enterprises on terms that make those who work within
the latter particularly vulnerable to exploitation (Rogerson,
1991b, 1994a). Nevertheless, whereas subcontracting of production
activities is a widespread phenomenon in Latin America and parts
of Asia (Rogerson, 1994a), its occurrence is less common in urban
Africa "owing to the lower levels of industrialization, and
the lower levels of skills and quality in African informal
sectors" (Meagher and Yunusa, 1991, p. 3). Evidence is
available of limited amounts of industrial subcontracting between
formal and informal micro-enterprise taking place variously in
the cities of South Africa (Rogerson, 1994b, 1995c) and Côte
d'Ivoire (Moser et al., 1993). More prevalent than production
subcontracting is subcontracting by formal sector commercial
firms to informal traders in order to take advantage of lower
overheads and the wider markets available within the informal
economy (Meagher and Yunusa, 1991).

It has been argued by some observers that the
"predominance of trade-based linkages and survival
strategies in African informal sector expansion suggests a low
potential for the emergence of a productive dynamic informal
sector, particularly under conditions of economic crisis and
structural adjustment" (Meagher and Yunusa, 1991, p. 3). The
international experience of "informal economies of
growth" points to the conclusion that a dynamic informal
economy of "growth enterprises" cannot be created
simply by legislative programmes for deregulation; rather, what
will be required is state support in the areas of credit,
technical training, and human resource development, together with
coherent interventions to support a transition of informal
enterprise beyond merely the production of low-quality consumer
goods into other spheres of production (Rogerson, 1991b,c,
1995c). An important focus for nurturing the group of
"growth enterprises" is the adoption, assimilation, and
upgrading of technology (Maldonado, 1989; Maldonado and
Sethuraman, 1992). In addition, ILO research cautions that
"in formulating policies towards the informal sector,
policy-makers (in Africa) need to give more attention to the
macro policy environment rather than focussing exclusively on
projects targeted at specific groups of enterprises"
(Tesfachew, 1992, p. 29). Conditions for fostering an
"informal economy of growth" as opposed to an
"informal economy of bare survival" are rarely evident
if one reviews the patterns of state intervention as regards the
micro-enterprise economy. The picture that emerges overwhelmingly
across Africa of a weak implementation capacity and limited
attempts, if any, to nourish a flourishing small-scale enterprise
economy linked to large-scale enterprise in a mutually supportive
manner (see Assuncao, 1993; Peters-Berries, 1993a,b,c). To cite
two recent assessments of Kenyan state policies towards the
informal economy, Machuria (1992, p. 235) argues that the state
in Kenya has supported the informal sector "only
half-heartedly, despite public statements and policy
publications"; likewise, another study concluded that the
government "speaks strongly in support of the urban
self-employed, but practical support has been limited and
uneven" (House et al., 1993, p. 1218). Moreover, although
official documents assert the importance of informal and small
enterprise development, "program development and
implementation have frequently lagged behind and occasionally
contradicted stated policy" (House et al., 1993, p. 1218).
The situation of the urban informal economy in contemporary
Zambia typifies much of the rest of the continent: the
micro-entrepreneur "has to struggle with an extensive
underwood of inhibitive regulations, hostile local authorities
and lack of support facilities" (Peters-Berries, 1993a, p.
11).

A final set of issues concerning inter-enterprise
relationships relates to the assertion of Schmitz (1990, 1992)
that the encouragement of flexible specialization and of sectoral
clusters of small and medium-sized firms is potentially an
important means for boosting competitiveness and collective
efficiency in urban African industrial development. The notion of
flexible specialization relates back to "the new
competition" in the global economy, which is based on an
entrepreneurial firm, often located in an industrial district
(van Dijk, 1993a,b; Pedersen et al., 1994). A major premise is
that the capacity for growth of small enterprises cannot be
achieved individually; instead it depends on the efficiency and
flexibility made possible by geographical clustering and by a
division of labour between enterprises. As Dawson (1992, p. 34)
avers, the degree to which "small firms are capable of
dynamic and innovative endogenous growth is seen as being
primarily dependent on clustering." In turn, this
"opens up efficiency and flexibility gains which individual
producers can rarely attain" (Schmitz, 1992, pp. 64-65).
Recent important research points to the possible emergence in the
developing world of local areas of "collective
efficiency" within sectoral agglomerations of small-scale
industrial enterprises, including parts of urban Africa (Schmitz,
1990; Dawson, 1992; van Dijk, 1993a,b; Nadvi, 1994; Pedersen et
al., 1994).

The developmental possibilities of further promoting this form
of flexible specialization, small-firm industrial development in
Africa have been raised by several writers (Aeroe, 1992;
Rasmussen, 1992a,b; Rasmussen et al., 1992; Rogerson, 1994a).
Policy interventions to foster inter-firm cooperation should
consider the lessons of international experience, which point to
the potential for encouraging dynamic growth based on cooperative
networks of small firms and micro-enterprise. In dynamizing
sectoral agglomerations of micro-enterprise an important
"enabling" role falls to local urban authorities.
Although the major models for advocating this type of urban
economic development are drawn from the successful small-firm
industrial districts of Italy and Denmark (Pyke, 1993), the
relevance of the "industrial cluster" model to the
developing world context has been convincingly shown in a series
of important works (Schmitz, 1990, 1992; Schmitz and Musyck,
1993; Nadvi, 1994; Nadvi and Schmitz, 1994). Undoubtedly, the
extent to which this small-firm industrial development model can
be successfully fostered will be vital to the trajectory of
African urban economies in the 1990s. In particular, the
fostering of small-firm industrial districts could make the
informalization of African urban economies a positive base for
long-term urban efficiency.

Finally, beyond policy interventions directed towards an
informal economy of growth, government decision makers in urban
Africa must formulate a set of strategic programmes to furnish an
appropriate environment for the operations of survivalist
informal enterprise. Several studies have offered packages for
enhancing livelihoods in this informal economy of survival, which
is often dominated by communities of hawkers and garbage pickers,
or an array of home-based enterprises (Rogerson, 1991c; Tevera,
1993, 1994).